Stevanato Group at KeyBanc Forum: Strategic Growth in Pharma

On Tuesday, 18 March 2025, Stevanato Group (NYSE: STVN) presented at the KeyBanc Annual Healthcare Forum 2025, sharing insights into its strategic direction and market positioning. The discussion, led by CFO Marco Del Lago and Investor Relations Lisa Miles, highlighted the company’s focus on the pharmaceutical sector, its robust product portfolio, and both the challenges and opportunities it faces in the current market landscape.

Key Takeaways

• Stevanato is concentrating on the pharmaceutical industry, with a strong presence in cartridges and sterile vials.
• Expansion projects in Indiana and Latina are progressing, with expected full ramp-ups by 2028 and 2027, respectively.
• The company is addressing engineering challenges with an optimization plan that is showing positive results.
• Biologics and biosimilars are key growth areas, with biologics making up 34% of PDS revenue in 2024.
• The company emphasizes quality and reliability over pricing, particularly in biologics.

Financial Results

• The Indiana expansion, initially budgeted at $200 million, has grown to $500 million, with commercial revenue already underway since Q3 2024.
• The Latina facility is ahead of schedule, contributing to commercial revenue and achieving positive gross profit in Q3 2024.
• Despite electronic component shortages affecting the engineering segment, revenue generation is expected to improve significantly in the latter half of 2025.

Operational Updates

• Stevanato has solidified its leading position in cartridges and sterile vials and ranks second in syringes.
• The company’s strategic shift away from cosmetics and beauty sectors allows it to focus exclusively on pharmaceuticals.
• An optimization plan is being implemented to overcome engineering challenges, with improvements anticipated by mid-2025.

Future Outlook

• Stevanato aims to increase its share of revenue from value products to 40% by 2025 and between 40% to 45% by 2027.
• The biologics segment, including GLP-1 products, is a significant growth area, with biosimilars offering substantial opportunities.
• The company expects sequential improvement in performance, with destocking trends subsiding and a return to normalcy in customer demand.

Q&A Highlights

• Growth in the easy fill market is influenced by Annex 1, though changes are expected to be gradual.
• Stevanato is well-positioned in dual chamber technologies, with destocking trends showing positive signals in recent quarters.
• The company remains focused on innovation and quality, aiming to maintain its competitive edge in the pharmaceutical sector.

In conclusion, Stevanato Group’s presentation at the KeyBanc Forum underscores its commitment to strategic growth and market leadership. For more detailed insights, readers are encouraged to refer to the full transcript below.

Full transcript - KeyBanc Annual Healthcare Forum 2025:

Paul Knight, Life Science Analyst, KeyBanc: Thank you very much. This is Paul Knight.

Good afternoon. I’m the Life Science Analyst at KeyBanc. And we have today Marco Del Lago, the Chief Financial Officer of Stefanado and Lisa Miles, Investor Relations. Stefanado went public in 2021 and listed here in The United States. And Marco, where were you before Stefan Auto and what you’ve learned being the CFO of a U.

S. Listed firm from Italy?

Marco Del Lago, Chief Financial Officer, Stefanado: Well, it’s a very exciting time for us. We decided in 2021 to go out from our comfort zone, the natural listing location will be in Milan. But we are happy about the decision we took. That was mainly driven by the fact that there are many, many peers in The US market, lot of CMO companies, and also the level of knowledge of, analysts and the overall environment is much higher than in Italy where there are more similar companies like Stevenato listed in the the Minas Stock Exchange. So for us, it’s a continuous stimulus to benchmark with the best in class in order to keep on improving and we are happy about the decision we made several years ago.

Paul Knight, Life Science Analyst, KeyBanc: Lisa, you’ve been in the Investor Relations business a long time, like I’ve been on the research side as well. But what kind of investor feedback do you get from Stefanado, where European based but U. S. Listed? What are the unique questions you might get?

Lisa Miles, Investor Relations, Stefanado: I think that, most of the investors are happy that we chose the path that we did in terms of going public in The U. S. I think that many of our peers who are traded here in The U. S, I think it really made sense for us. So I think, you know, overall, a lot of the questions that we receive from investors are consistent with what some of our peers, get as well.

Obviously, with just reporting our 2024 results, many of the questions that we’re getting while we’re out on the road this week relate to 2025 and our outlook and, some of the things that we see in terms of the long term outlook of demand, particularly as it relates for biologics and syringes and cartridges as we see significant demand in those particular areas.

Paul Knight, Life Science Analyst, KeyBanc: Maybe it’s Marco, Lisa. The question really that first question people ask is what makes Stephanado different than Schott, which is now public or Becton Dickinson? What’s your kind of unique advantage in the market?

Marco Del Lago, Chief Financial Officer, Stefanado: We have a strong focus on pharma. We are only focused on pharma. We have a really differentiated portfolio product. We can leverage an integrated value proposition. You know, we have engineering also in our value proposition that is helping us to provide to the pharma companies an integrated solution also.

Basically, we are number one in cartridges today. We are number one in sterile vials. We are number two in syringes where we have been able to grow significantly in recent years and we where we can see very strong demand and where we are investing in this period of time with expansion in, Matin and Fishers. So in an answer, what is making us different is probably our ability to consistently generate organic growth. We have a long track record with respect to the organic growth of the company and the integrated value proposition.

Paul Knight, Life Science Analyst, KeyBanc: And one thing that as we learned about Stephanado, in Europe, there used to be dozens of companies involved in glass. Now there’s you, Schott, Derisheimer, very, very limited market. What happened over these years to create the few players that we have?

Marco Del Lago, Chief Financial Officer, Stefanado: So first of all, the need is to be very consistent in quality because the market is moving more and more to our biologics that are requiring more sophisticated type of glass container solutions. So only if you keep a consistent level of quality, you can, you can play in that field. The other thing is the ability to grow through the investment we have been constantly doing to expand our capacity throughout the years. So you need to become a global player if you want to serve the larger pharma companies because basically they are asking us to be domestic in many different places where they, where they have their operation. So matter of fact, it’s a game for a few players and not a large number of small players.

Lisa Miles, Investor Relations, Stefanado: And if I can add, Paul, I think if we go back fifty years, that is when the company decided to really focus in pharmaceuticals. And so, you know, we moved away from some of the other cosmetics and beauty and wine bottles that we had been producing to focus exclusively in pharmaceuticals. And I think that was a really important step in the company’s evolution. Obviously, that focus has really helped to cement our space, our position in the space globally.

Paul Knight, Life Science Analyst, KeyBanc: And can you update us on the progress in Indiana and then also in Latina? But starting with Indiana, I know that when you went public, I think the plan was $200,000,000 of capital expenditure. I think now it’s $500,000,000 Where are you with opening of that facility?

Marco Del Lago, Chief Financial Officer, Stefanado: Yeah, you’re right, Paul. First of all, we started from a smaller plan. We basically decided to double the size because of strong demand and strong commitment we received from our larger customers. Then we had the agreement with BARDA when we further decided to expand the capacity in biochemistry field buyers, And we had also recently sunk capacity for the small space in rack delivery system. So we are happy about the expansion.

We started generating commercial revenue in q three twenty twenty four. We are keeping on progressing. We are happy with all the validation we received from main customers. We have five customer validators now, and we are keeping expanding the capacity. It’s a long process.

We cannot take shortcut in them. And our plan is, so far expected, our plan is to fully ramp up the facility by 2028.

Paul Knight, Life Science Analyst, KeyBanc: And, Ludwig?

Marco Del Lago, Chief Financial Officer, Stefanado: We are a little bit in advance compared with the features. We started generating commercial revenue in 2023. We kept on installing lines and grow capacity. With that, we generated positive gross profit in Q3 twenty twenty four. We further expanded in Q4 and we are progressing.

We believe we will be fully ramped up at the beginning of twenty seven, there, end of twenty six, beginning of ’20 ’7. So all overall, the two plans are in line with our expectation. The only fact is taking time to fully ramp up them because we are dealing with diabetic products for biologics mainly. We have large customer to serve with a multi year agreement in place. And when we are playing that field, we need to be careful to do each and every single step in order to guarantee the quality and the ability to serve other customers.

Paul Knight, Life Science Analyst, KeyBanc: And then Latina, Southern Italy was not, I think, was a longer term plan in 2021. Now it seems to be a very active project. Can you talk about the amount of capital expenditure in Latina? And what drove that?

Marco Del Lago, Chief Financial Officer, Stefanado: First of all, I need to go back, you are right, to the plan in 2021. Then the decision that at that time, the plan was to accelerate Asia Pacific investment. Then as usual, big decision, driven by customers. Our customers asked us to to accelerate the expansion in North America and Europe rather than in, in Asia Pacific. And this is the reason why we are creating this second up in Latina close to normal.

About CapEx, we did not disclose the exact amount. What I can tell you is that it’s a large investment but smaller than Fisher’s. It’s a brownfield, it’s not a greenfield And, but it’s a large investment for us. Recently, we decided to further expand the Latina because we signed an important cast, contract with one of our key customer to to store capacity in easy fill cartridges. And for us, it’s an important step because, today, the, penetration in sterile is relatively small in cartilages.

We are below 5% and this is a very important opportunity to switch the market to sterile following this contract. So we decided to further expand the Latina recently. And this is the main reason why, 2025, we are having more CapEx than anticipated.

Paul Knight, Life Science Analyst, KeyBanc: When you talk about number one in cartridges and easy fill cartridges, are cartridges for pin and auto injector?

Lisa Miles, Investor Relations, Stefanado: So cartridges, primarily are used in the pen injector. And as you know, we are the global leader in pen cartridges. And the pen injector is the global standard for diabetes care today. And so we are really leveraging our strong diabetes franchise and history in that particular treatment area to further broaden into obviously GLP-1s as well. And so if you look at the auto injector versus the pen injector, the auto injector will take a syringe.

So if we think about the types of syringes that we’re supplying for auto injectors, that would be the Nexa syringe. It has a high mechanical resistance, so it’s ideally suited for the force of an auto injector.

Paul Knight, Life Science Analyst, KeyBanc: Okay. Got it. And then, the, the the easy fill market, I know, is it driven by Annex one? Is that the primary driver for easy fill?

Marco Del Lago, Chief Financial Officer, Stefanado: It’s healthy for sure because it’s the purpose is to reduce the risk of contamination, so our easy fit solution is really suitable for for the purpose. We don’t expect this a very rapid change. It’s a tailwind, but it’s not happening overnight. It has to do with the decision of the customer to change their technology, we can see a strong signal to that direction, but it’s something that is taking time. Moreover, what I can tell you is that there are many factors that are, boosting the pharma company to to move to sterile configuration, not only the Amex one, because we believe we can improve the quality, providing sterile products, ready to fill products, but also the total cost of ownership is another advantage the pharma company can take from selecting this type of solution.

So it’s not always a matter of, yes, it’s because of our next one. Sometimes a lot of factors are combining and helping the pharma company to take the decision. With respect of that, we can see that overall, we are in line with our trajectory to as a share of revenue in a value products. We reached 38% in 2024. Our guidance is to reach 40% as a set of point in 2025.

And you probably remember, we announced two, three years ago, our goal to be between 40% to 45% as a share of revenue by 2020.

Paul Knight, Life Science Analyst, KeyBanc: And then, Marco and Lisa, a question we have had here is, what were the problems in engineering? And, are we past getting those problems

Marco Del Lago, Chief Financial Officer, Stefanado: fixed?

Lisa Miles, Investor Relations, Stefanado: I’ll start. So it was, frankly, a bit of a high class problem. So in 2022, we won record orders. And so as we started to execute on those orders, we ran into challenges as it relates to being able to secure electronic components that are necessary to build these large, complex manufacturing lines. And so as a result of that, we ran into delays and we did struggle to move some of these lines along from a project perspective.

And so we did a took a number of actions. And as we’ve been discussing the last couple of quarters, we have launched an optimization plan, that is beginning to bear fruit and we’ve seen some positive results as we moved into the fourth quarter. And so this includes things such as, you know, we did increase some resources, we’ve moved some resources, we’ve restructured some of our activities, and streamlined processes to better harmonize, I would say, the overall cost structure within the engineering segment. And so I’ll hand it off to Marco now to talk about where we’re going and how we anticipate engineering will continue to improve.

Marco Del Lago, Chief Financial Officer, Stefanado: Yes. Thanks, Lisa. We have a good signal. Sequentially, we improved the profitability in Q3 and Q4 compared with Q2. Where we are now with respect of the recovery of the delays, we are doing relevant progresses.

We plan to complete the recovery of the delay by mid of the year. In the meantime, we are taking new commitments with with customer because we are, we believe we have already robust plan to to deliver the machines. And matter of fact, we expect to increase significantly the revenue generation in second half of twenty twenty five. Overall, the year is expected to be flat or low single digit growth compared to 2024 because it’s still a year where we need to focus on execution, satisfy our key customers.

Paul Knight, Life Science Analyst, KeyBanc: And who do you compete? Who does engineering systems? Who’s the competitors globally?

Marco Del Lago, Chief Financial Officer, Stefanado: It depends on the application in assembly and packaging. We have some competitor in visual inspection. Other, I can mention, and other players. We are not talking about huge players there. We are well positioned in both assembly packaging and

Paul Knight, Life Science Analyst, KeyBanc: visual inspections. Okay. Thank you. And then the just reading a question here, sorry. When you’re with these customer contracts, what’s the average lifespan?

Marco Del Lago, Chief Financial Officer, Stefanado: Well, when we talk about multi years agreement in glass containment solutions, Normally, we have a three years contract. When it’s time to install new capacity dedicated for customer, we can go from five to ten years. So it depends on the situation. In this period of time where there’s capacity to be created for securing the supply chain for contract in place.

Paul Knight, Life Science Analyst, KeyBanc: And then how big is the GLP one business for you? Is it you just did you talk to how percent of revenue? Well, we disclosed the revenue in biologics.

Marco Del Lago, Chief Financial Officer, Stefanado: GLP one is part of the biologics in our disclosure. We are growing. We are growing biologics. So we moved from, 30% as a percentage of revenue in PDS to 34% in 2024. We are happy about the presence in biometrics.

It’s not only GLP ones there. We we we can rely on monoclonal antibodies and also biosimilar will play in the future an important role to further expand our biologics revenue.

Lisa Miles, Investor Relations, Stefanado: So, Paul, we provided some qualitative details on our GLP one business. And, essentially, we are providing all products across the glass portfolio. So high value syringes, bulk cartridges, easy fill cartridges, vials and ultimately some bypass syringes as well. And if we turn our attention to the engineering segment, we have also sold manufacturing lines specifically for final pharmaceutical visual inspection as well as for the assembly and packaging of devices. And,

Paul Knight, Life Science Analyst, KeyBanc: you know, when I talk pricing in the industry or when I talk with Stephanado or Gerascheimer or, Schott, etcetera, Pricing is not coming up as an issue. What is pricing like when you were working with biotechnology or Lilly or Novo? Or Is price even brought up or how do they decide on you and your contract or how do they decide how much you have, how much maybe a shot has? Is that ever a discussion?

Marco Del Lago, Chief Financial Officer, Stefanado: Well, when we talk about, blockbusters, for example, a company wants to mitigate the risk and have more than one supplier, The big focus is on reliability of the partner and the quality the partner can provide. We are happy about the quality we provide to our customer. We have a global footprint. We produce seven, eight billion species per year with a really consistent quality all over the world. This is, together with the delivery time, a much more important factor for the pharma company because the the cost of the container is container is mission critical, but the cost compared to the overall cost of treatment is pretty low.

So the the customer wants to have a reliability rather than pushing down the the price. So we can play in this field, especially the more we move to our biologics and the value products, the more is the quality and the consistency rather than the price.

Lisa Miles, Investor Relations, Stefanado: And once you’re in there, Paul, the number one decision is going to be on performance of the primary packaging with the specific drug treatment. So, they need to ensure, obviously, stability, integrity, no delamination, or particle generation. And so that really is the primary driver for their decision. And as Marco notes, there’s been a number of factors as well. What does the footprint look like?

What type of supply chain is there? And so that’s typically how the decision is made from the primary packaging side.

Paul Knight, Life Science Analyst, KeyBanc: Has your expansion in Indiana allowed you to take share, do you think?

Lisa Miles, Investor Relations, Stefanado: If I heard you correctly, did you ask if our expansion in Indiana has helped us to take share? Yes. So, in Indiana at the moment, we are just ramping up syringe capacity. We are still in the very early days of ramping up at that location. We would say that our goal is not to take market share, right?

Our goal is to win our fair share and more. And the market is growing, across the board for syringes and cartridges. There’s high demand in these areas, really principally driven by biologics and obviously the trend towards the self administration of medicine. So, we don’t view this as taking share. We view it as really winning our fair share.

Paul Knight, Life Science Analyst, KeyBanc: And does it sorry. Do your customers want Stefanado as the sole supplier or do they want two suppliers or more?

Marco Del Lago, Chief Financial Officer, Stefanado: I was saying before, they they especially for Blockbusters, they want at least two suppliers, but we are happy about being part of the main products and blockbuster, trying to play as number one. Sometimes we are number two supplier, but we are pretty happy about the relationship we have with our customers that is a long term relationship, and especially in high quality products we can play in.

Lisa Miles, Investor Relations, Stefanado: So it’s fair to say, Paul, that particularly in our market area, that pharma does prefer to dual source most of the time. And in blockbusters, we can see even more than dual source.

Paul Knight, Life Science Analyst, KeyBanc: Okay. And then we hear a lot of news around dual chamber. Is Stefonado involved in dual chamber?

Marco Del Lago, Chief Financial Officer, Stefanado: Yes, we are. We master the technology of the glass forming for dual chamber. So it’s one of our product. And most importantly, we own we own we mastered the technology, the glass forming. So we are very well positioned because we can rely on the processes.

Lisa Miles, Investor Relations, Stefanado: Yeah. And, Paul, what’s really neat and a fun fact that I find about our manufacturing lines for dual chamber products is that, they’re modular. So, the dual chamber module of the glass forming line can be removed. And so, it’s highly flexible manufacturing line, which I think is a really exciting piece of that particular business.

Paul Knight, Life Science Analyst, KeyBanc: Meaning, when we hear good or bad news on the new generation of therapies, it shouldn’t drive the stock, meaning you could go to a single dual chamber?

Lisa Miles, Investor Relations, Stefanado: Exactly. Those manufacturing lines have sufficient flexibility to allow us to go in either direction.

Paul Knight, Life Science Analyst, KeyBanc: I’ll know how to answer the five emails the moment that comes out now. Thank you. Okay. And then on the biosimilar market, what’s the growth rate there? I mean, I think the growth rate of biologics is, according to consensus, is maybe 10%.

What’s the biosimilar growth rate in your opinion?

Lisa Miles, Investor Relations, Stefanado: Probably consistent with the biologics. I mean, so we view biosimilars obviously as the big opportunity for us. And I think as we talked about at Capital Markets Day in particular, as we think about biosimilars and drugs coming off patent, we think that there’s a really strong opportunity there, particularly in device platforms, which as you know, we’ve been investing in over the last several years. But if you look at large pharma, many of them have their own proprietary platforms and that’s not where we want to play. We want to focus in those areas where we see real opportunity for platform devices for those mid sized biotech where we know they’re looking for those types of solutions because they spend the bulk of their resources on drug development.

So we think it’s a really exciting time in biosimilars. I mean, not just here in The U. S, but around the globe as well.

Marco Del Lago, Chief Financial Officer, Stefanado: But also for that drug containment solution, for glass containment solution, the tendency is to use the same solution the originator is using to gain speed in the go to market. So we are really covering commercially all the opportunities, not only with the originator, but also in the biosimilar to be ready as soon as they are ready in order to take the opportunity.

Paul Knight, Life Science Analyst, KeyBanc: And then I’m getting the question of destocking less and less. Maybe you are too. I think your view is destocking is finally starting to subside.

Marco Del Lago, Chief Financial Officer, Stefanado: Yes. We saw positive signals in Q3 and Q4 last year that were better with respect of first half of the year. But with, in orders intake and also in revenue generation. Q four was better in revenue generation compared to the previous quarters. We still see a mixed situation where some customers went back to normal already, providing the long term forecasted suppliers.

Other customers are still reducing the level of inventory, so it’s a mixed situation, but we see a signal of improvement. Our view for the next quarter is a sequential improvement throughout the year with the back buyers accelerating and go back to normal before the dry buyers. This is for 2025. We believe it’s not a matter of, if the buyer market will recover, but more when it will be fully recovered. But we see sequential improvement along the year.

Paul Knight, Life Science Analyst, KeyBanc: Yeah. I mean, I think there was a little misunderstanding on destocking. You’ve given us insights. I mean, it wasn’t just COVID vaccine vials, right? It was everything used in a hospital.

Is that the better way to think about the big vial demand?

Lisa Miles, Investor Relations, Stefanado: I think that’s right. So you have to remember, during the pandemic, there was a lot of concern that there would be a shortage in vials. And so naturally, from a risk mitigation perspective, those companies that had any treatment in a vial took steps in order to ensure that they had the appropriate primary packaging that they needed. And so as a result, that’s how you ended up with a lot of product within the channels. It was really a risk mitigation from pharma companies, just with the concern that there was going to be a vial shortage.

Paul Knight, Life Science Analyst, KeyBanc: Okay. Thank you. You know, with that, you know, I think we are wrapping up the end of this session. But thank you very much, Marco, and thank you as well, Lisa.

Lisa Miles, Investor Relations, Stefanado: Thank you for having

Paul Knight, Life Science Analyst, KeyBanc: us. Okay.

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